Channels of Distribution

Topics: Wal-Mart, Grocery store, Hypermarket Pages: 5 (866 words) Published: July 30, 2013
RETAIL HEARTBEAT
Pulse Report: Channel blurring
In a fiercely competitive environment,
retailers can win market share by better addressing shoppers’ and consumers’ evolving needs. Faced with budget constraints and higher food and fuel prices, many shoppers are trimming basket size to save money while making more frequent trips to nearby drug, dollar and grocery stores, according to new analysis from SymphonyIRI Group. In turn, drug and dollar retailers have boosted their food and beverage offerings, while many grocers are rounding out their personal care product lines. “This increased channel blurring is the result of a highly competitive CPG marketplace,” says Mark Mark Parise, president of IRI Parise, president of IRI, a business unit of SymphonyIRI. “CPG marketers understand that consumers are seeking low-cost solutions to everyday needs, and they are acting to capitalize on that opportunity.” In their quest for value, consumers increasingly are willing to shop at a variety of channels to find the products they want at prices they can afford. With 55 percent of consumers eating out less often than prior to the recession, grocery retailers have stepped up their merchandising of convenient prepared foods while updating store formats to attract more consumers. Across channels, two-thirds of CPG categories have enjoyed increased merchandising support during the past year. At the same time, supercenters are enhancing their product assortments after attempts to scale back the number of SKUs resulted in some customers shopping elsewhere. “Winning in CPG today is about getting the right products to the right place at the right time,” says Parise. “In other words, retailers must understand and deliver against the needs of key shoppers. A broad assortment, one-size-fits-all approach is simply not effective.”

the pulse of the marketplace
NUMBER OF CHANNELS SHOPPED
Percent of Consumers 2011

5% 1% 19%

2%
Channels shopped

7% 14%

28% 24%
SOURCE: SymphonyIRI Consumer Network™, 52 weeks ended 6/5/11

n ONE n TWO n THREE n FOUR n FIVE n SIX n SEVEN n EIGHT

PERCENT OF CONSUMERS SHOPPING MULTIPLE CHANNELS BY NUMBER OF CHANNELS SHOPPED Quarterly Point Change vs. Year Ago, 2010-2011
NUMBER OF CHANNELS

1.5 1.0 0.5 0.0 -0.5 -1.0 -1.5
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011

SOURCE: SymphonyIRI Consumer Network™

PERCENT OF HOUSEHOLDS BUYING BY CHANNEL
Channel Penetration Pt. Chg v 2010

Grocery Supercenter Mass Merchandise Club Drug Dollar Convenience

98.7%
72.9%

+0.1
+1.5

76.4% 52.5% 78.8% 63.7% 34.6%

(1.4) +0.9 (0.3) +0.3 +0.1

SOURCE: SymphonyIRI Consumer Network™, Shopper Insights Advantage™ (SIA), 52 weeks ended 6/5/2011

22

Retail Leader.net SEPTEMBER/OCTOBER 2011

Bright spot: Expanding healthcare merchandise
With more than one-third of consumers striving to reduce medical expenses through self-treatment, retailers are placing a strong merchandising emphasis on healthcare treatments and accessories. Drug retailers benefited the most from the trend with their share of dollar sales climbing in nine of 10 healthcare categories, while grocery retailers also added health-related products and gained dollar share in seven categories, SymphonyIRI Group reports.

KEY HEALTHCARE CATEGORIES: DOLLAR SHARE POINT CHANGE 2011 VS. 2010 Grocery First Aid Accessories First Aid Treatment Cold/Allergy/Sinus Tablets Gastrointestinal Liquids Gastrointestinal Tablets Internal Analgesics Nasal Products Vitamins Weight Control/Nutrition Liquid/Powder Home Health Care Kits (0.1) 0.0 (0.1) +0.4 +0.7 +0.1 Drug Supercenter (0.8) +0.1 (1.1) (0.9) (0.6) (0.8) (0.6) (0.7) (0.2) Club (0.5) (0.6) (0.6) (0.2) (0.9) (0.7) (0.1) (0.2) (1.1) +0.2

+2.2
+0.9 +1.8 +1.9 +1.4

+2.3
+1.4 +1.1 +0.2 (1.1)

+0.9
+0.6

+1.5
+0.1

+1.3

SOURCE: SymphonyIRI Consumer Network™, Shopper Insights Advantage™ (SIA), 52 weeks ended 6/5/2011

Blurred merchandise assortments
Retailer efforts to cater...
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